• Author:: [[Susan P. Crawford]]
• Full Title:: Captive Audience
• Category:: [[books]]
• 

• Highlights first synced by [[readwise]] [[September 2nd, 2020]]

  • Truly high-speed wired Internet access is as basic to innovation, economic growth, social communication, and the country's competitiveness as electricity was a century ago, but a limited number of Americans have access to it, many can't afford it, and the country has handed control of it over to Comcast and a few other companies. (Location 71)
  • In America, only around 7 percent of households have access to fiber, and the service costs six times as much as it does in Hong Kong (and five times as much as it does in Stockholm). (Location 201)
  • fully a third of Americans don't subscribe to high-speed Internet access, and nonsubscription is highly correlated with low socioeconomic status.20 This situation has arisen because Americans have allowed the companies involved to cherry-pick wealthy neighborhoods for service and charge whatever they like. (Location 233)
  • Consider the AT&T divestiture of 1984, which forced long-distance prices down and led to innovations in long-distance service. That divestiture has now been completely undone by litigation and lobbying; instead of the twentieth century's Ma Bell, we now have Ma Cell. Part of the story of communications in America is the fact that in the separate market for wireless access, two giant companies, AT&T and Verizon, have the power that Comcast and Time Warner have in wired access. (Location 305)
  • “When the same company that produces the programs runs the pipes that bring us those programs, we have a reason to be nervous.” (Location 1635)
    • Note: -Al Franken
  • AOL's early success was made possible by regulation. Its business depended on having subscribers reach it by using their home phones; subscribers would attach a modem to their computer, connect the computer to a phone line, dial a local Telenet access number, and send data back and forth to AOL's servers. AOL took off only because the phone companies had no legal ability to block it. The common-carriage regulation, which required the phone companies to allow anyone to use their lines, was still alive and well. (Location 1688)
    • Note: The more I read, the more I lean toward the conclusion that separating the ISP from the physical network is as important as, if not more important than, separating the ISP from the content.

With dial-up and DSL, you didn't get a new phone line installed to use a new ISP, you used the same wire. Why can't we do that with coax or fiber? Seems like it'd be way more efficient and offer more choice. - The phone companies themselves were not allowed to get into the data business as a result of the conditions imposed on the AT&T breakup, but they were angling to squash the IBM-backed Prodigy, one of the earliest online-access companies. They had convinced FCC chairman Dennis Patrick that Prodigy should pay per-minute “interstate access charges” for the privilege of being reached by the phone companies’ subscribers, on the theory that the online database companies were, in essence, playing the same role as long-distance companies: using local phone facilities to reach subscribers. Had the phone companies succeeded, the Internet revolution would have been stalled in its tracks; the extra charges would have made Internet access a luxury rather than a necessity. Fortunately for American innovation, they failed. (Location 1693) - Without cheap, flat-rate access to local residential users, they were sunk. (Location 1705) - The flat-rate, inexpensive lines for Internet access that the phone companies were obliged to provide led to an explosion of consumer interest in the Internet, and success for AOL and its competitors. “Imagine the history of the Internet if I hadn't done that,” Markey says now. (Location 1715) - “NBC has less than 1 percent; Comcast has less than half of 1 percent; Hulu [co-owned equally by NBC, ABC, and Fox at the time] has less than 4 percent; and Google has over 50 percent. (Location 2057) - Note: Comparing online TV programming to all online video is silly. YouTube and Netflix are not direct competitors. - “It is entirely feasible that government may choose to open these networks up. They could come in, for instance, and tell cable operators they can't bundle broadband with video, with telephone, that they've got to sell them all a la carte and they can't do any deep discounting, no exclusionary deals and so on. (Location 2120) - The genius underlying TV Everywhere is that most pay-TV subscribers will believe that their cable provider's online aggregation of content is free, whereas they will perceive that they have to pay extra for, say, Netflix. (Location 2198) - But Scripps is not an eight-hundred-pound gorilla like Disney's ESPN. It needs Comcast distribution—badly—to survive. Here even before the NBC Universal merger Comcast had leverage. It could say to Scripps, “If you make your material available online, we'll make life materially uncomfortable for you. We'll move your channels to a less-widely distributed tier. We'll cut the subscriber fees we pay you. Your life will be hell. (Location 2232) - So Comcast wins either way. Inside its own territory, it can turn all the dials—access to content, access to a guaranteed connection—to block any online video package seeking to compete with its own products. Outside its territory, it can underprice the other operators’ packages. John D. Rockefeller would love such brutal elegance. (Location 2295) - Fans who want to watch their teams will have to sign up with Comcast, and Comcast's strength in video raises even higher barriers to entry for any business that wants to compete in providing wire for Internet access into homes. (Location 2836) - As ESPN vice president Damon Phillips told the Chicago Tribune in 2008, with broadband Internet today, “people base their decision on speed and price. We think that will change, with content being the deciding factor.”40 (Location 2878) - Common carriage separates content from conduit by requiring the pipe to be only a pipe. (Location 2990) - When you dig into the details, however, usage-based billing rates bear little relationship to actual network costs or to solving the problem (Location 3268) - of congestion. It is purely a way to raise revenues. (Location 3269) - The real problem for cable broadband networks, which are shared within neighborhoods (and so subject to “contention,” which means that you are battling with your neighbors for the flow of bits you want, in a context in which the cable distributor has no incentive to invest in better connections to increase the flow of bits), is the traffic during peak usage time, not the total amount of usage. (Location 3277) - But connecting networks—pure-play, no-retail pipe providers like the company Level 3—argue that the hot-potato aspect of the traditional equation no longer applies. Rather than drop off traffic to Comcast at the point where it originates, they are portaging traffic as close to the relevant consumers as possible—taking it to the New York metro area, in our example, (Location 3431) - instead of handing it off in Los Angeles—and so the connecting networks should not have to pay Comcast.55 In fact, Comcast should pay the connecting networks for bringing so much content that Comcast's subscribers want almost the entire way. And by the way, the connecting networks argue, Comcast's outgoing traffic has no way of reaching subscribers of Verizon and Qwest without going through them—another reason Comcast should pay them, rather than the other way around. (Location 3434) - In November 2010 a battle royal over Internet interconnection broke out when Level 3 made a deal with Netflix to carry its traffic to Comcast's retail, last-mile network. Although the details are unknown, Comcast apparently demanded that Level 3 pay for local distribution, which had the effect of raising Netflix's costs. Level 3 felt that Comcast was making up its rates arbitrarily and planning to disadvantage Netflix through its interconnection arrangements. But Level 3, which carries the most Internet traffic of any network in the world, also felt it had little choice but to pay up—while complaining to the news media.56 Coverage of the fracas was swift and confused. A few months later, Level 3 announced that it would buy another connecting network, Global Crossing; the betting was that Level 3 needed even greater scale and power to control its own destiny in the face of ever-consolidating last-mile providers. (Location 3447) - Cohen explained in a 2009 interview with C-SPAN that the idea of wholesale access was a serious mistake: “Any requirement that our networks—built with private dollars, with no guaranteed taxpayer return—would have to be opened to anyone who wanted to retail or wholesale those services at a governmentally regulated rate, that is not a very good way to stimulate ongoing investment in the private network.” The threat seemed plausible to regulators: if the government pushed for wholesale access, the cable industry would never build faster networks. (John D. Rockefeller had often made a similar point: “To justify Standard's plush earnings,” Ron Chernow writes, “Rockefeller cited everything from fire hazards to the vagaries of drilling to the need to invest in new fields.”)26 (Location 4286) - America needs more people who can calmly and rationally oppose the free-marketeer rhetoric. People who don't have the knee-jerk response that “we tried regulation in the 1996 Telecommunications Act and it didn't work.” People who see the public provision of high-speed Internet as a vital role of the public sector, who are willing to fight for years against vested interests to make it happen. People who can understand this issue and then channel their understanding into useful, long-term political engagement. People who will make this an electoral issue for all public offices. (Location 5004)